Pay to Skip Ads, See Ads Anyway By Mark Fleischmann August 7, 2009 — When the phrase "video revolution" was in vogue, a generation of viewers weaned on commercial broadcast TV suddenly found they could skip ads in a whole bunch of new ways. With a VCR, they could time-shift programming and fast-scan through ads. They could rent ad-free movies at a video store (trailers don't count). And they could subscribe to pay-TV channels, paying for hipper programming almost without ads. But the heirs to those technologies—DVRs and video on demand —are increasingly overrun by ads, even though consumers have paid to avoid them.

TiVo—how could you? Though viewers pay for the name-brand DVR's program guide, that doesn't guarantee them immunity from ads. The Associated Press reports: "TiVo, the creator of the digital video recorder that panicked the TV business by making it simple to skip ads, now flashes banners on TV screens when users pause, fast-forward or delete shows. Viewers who paused 'The Biggest Loser' TV show saw an ad saying 'Jenny Craig says you've got more to lose!' If you used TiVo to pause 'Iron Chef America' on the Food Network, this popped up: 'Sub-Zero: Every cook deserves the best!'" An outraged viewer noted that "they're getting paid at both ends." Some DVRs rented to cable customers disable commercial skipping.

There is a twist to the story—ads are changing their shape, especially on video on demand channels. The same AP story reports that a Comcast study found viewers shown targeted ads watched them 38 percent longer than viewers of untargeted ads. Time Warner is superimposing interactive ad banners on top of other ads—viewers would press a button to get more information. Cablevision's advertiser-specific VOD channels are practically giant multifaceted ads in themselves. The cable op tells advertisers know how many viewers watch videos, how long they watch, and how often they ask for more information. The CEO of an ad agency that specializes in customized ads warns: "If you took out the ad support, your bill would triple or quadruple." We cannot verify that statement.

Of course, you are reading this in an ad-supported medium. Who are we to criticize? Well, ads in magazines bring in more revenue than subscriptions, and ads on free websites are the only source of revenue. So we're not knocking our own sources of income. But magazines are cheap, and websites are free—and the insurgency of ads into premium-priced video media still leaves us feeling a little queasy.